How to calculate daily rate of pay for unpaid wage waiting time penalty?
The following are examples of calculations of the daily rate of pay and computations of the waiting time penalty. In each instance, these examples assume all of the conditions for imposition of the penalty exist and that there is no good faith dispute that any wages are due.
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A security guard is discharged on Friday, July 12, 2002, and not paid all of her earned wages due until Monday, July 22, 2002, ten days later. She regularly worked 35 hours per week, Monday through Friday, and was making $8.00 per hour at the time of her termination.
Daily Rate of Pay Calculation
35 hours/week ÷ 5 days/week = 7 hours/day
7 hours/day x $8.00/hour = $56.00/day (daily rate of pay)
Waiting Time Penalty Calculation
10 days, the number of days between the date the employer was obligated to pay the employee, July 12, 2002, and July 22, 2002, the date she is paid all of her wages. (See Labor Code Section 201, discharge of employee; immediate payment)
10 days x $56.00/day = $560.00 waiting time penalty.
Fired Full Time Employee
A salesclerk is discharged on Friday, May 3, 2002, and not paid all of his earned wages due until Friday, June 14, 2002, 42 days later. He regularly worked 40 hours per week, Tuesday through Saturday, but during the last week of his employment he worked four hours of overtime. At the time of his termination, the employee was earning $10.00 per hour.
Daily Rate of Pay Calculation
40 hours/week ÷ 5 days/week = 8 hours/day
8 hours/day x $10.00/hour = $80.00/day (daily rate of pay)
This example shows that occasional or infrequent overtime is not included in calculating the daily rate of pay for purposes of determining the amount of the waiting time penalty.
Waiting Time Penalty Calculation
30 days. Although the employee was not paid all of his wages due until June 14, 2002, 42 days after the date the employer was obligated to pay him, the maximum penalty allowed under the law, is 30 days’ wages. Labor Code Section 203
30 days x $80.00/day = $2,400.00 waiting time penalty.
This example shows that the maximum penalty allowed under the law is 30 days’ wages.
Employee Quits with Overtime Wage Owed
A fry cook voluntarily quit her job on Tuesday, July 2, 2002, without giving notice to her employer. She regularly worked 45 hours per week, Monday through Friday, and was making $10.00 per hour when she quit. She is paid all of her earned wages due on Friday, July 12, 2002, 10 days after she quit.
Daily Rate of Pay Calculation
45 hours/week ÷ 5 days/week = 9 hours/day
8 hours/day x $10.00 per hour = $80.00
1 hour/day overtime x $15.00/hour (1� x $10.00) = $15.00
$80.00 + $15.00 = $95.00 daily rate of pay
This example shows that regularly scheduled overtime is included in calculating the daily rate of pay for purposes of determining the amount of the waiting time penalty.
Waiting Time Penalty Calculation
7 days. The employee is entitled to only seven days’ wages as the penalty because the employer has 72 hour (3 days, which in this example would be until July 5) to pay terminal wages when an employee quits without giving at least 72 hours prior notice of his or her intention to quit. (See Labor Code Section 202, quitting employee; payment within 72 hours)
7 days x $95.00/day = $665.00 waiting time penalty.
This example shows that the employer has 72 hours to pay terminal wages when no notice or less than 72 hours prior notice of intention to quit is given.
Part Time Employee Quits
A part-time file clerk voluntarily quit his job on Friday, March 15, 2002. On Friday, March 8, 2002, he gave his employer notice that he was quitting on the 15th of that month (more than 72 hours notice). He regularly worked two days per week, four hours per day. He was making $7.50 per hour when he quit. He is paid all of his earned wages due on Friday, April 5, 2002.
Daily Rate of Pay Calculation
4 hours/day x $7.50/hour = $30.00/day (daily rate of pay)
Waiting Time Penalty Calculation
21 days, the number of days from the date the employer was obligated to pay the employee, March 15, 2002, until April 5, 2002, the date he was paid all of his wages.
21 days x $30.00/day = $630.00 waiting time penalty.
This example shows that the waiting time penalty applies to employees regardless of whether they are part-time or full-time, and that when an employee gives at least 72 hours prior notice of intention to quit, and quits on the date given in the notice, the employer’s obligation to pay all of the wages due is the date that the employee quits.
Fired Commission Sales Employee
A commission salesperson working for an appliance dealer is discharged on May 10, 2002. She is not paid her earned commission wages due until May 25, 2002, the regular payday. She regularly worked 40 hours per week, five days per week. For the last three full months of her employment, on average she earned $3,000.00 per month. As of the date of her discharge, May 10, 2002, all commissions since the end of the previous pay period had been earned and were calculable by the employer on that date. At the time of her discharge, the employee did not know the amount of commissions she had earned since her last pay period.
Daily Rate of Pay Calculation
$3,000.00/month x 12 months/year = $36,000.00/year
$36,000.00/year ÷ 52 weeks/year = $692.31/week
$692.31/week ÷ 5 days = $138.46/day (daily rate of pay)
Waiting Time Penalty Calculation
15 days, the number of days from the date the employer is obligated to pay the employee, May 10, 2002, until May 25, 2002, the date she is paid all of her wages.
15 days x $138.46/day = $2,076.90 waiting time penalty.
Salesperson Employee with Salary Quits Job
A salesperson is paid a fixed salary of $2,500.00 per month and a commission of 10% of sales she makes each month. She quits her job on March 15, 2002 after providing more than 72 hours notice of her intention to quit. She quits on the day given in her notice. For the past three months she has averaged $1,500.00 in commission wages each month. She regularly worked 40 hours per week, five days per week. She is paid her salary wages on March 15, 2002, the day she quits; however, she is not paid her commission wages until April 1, 2002, the regular payday for commissions. All commission wages were earned prior to March 15, 2002, and were calculable by the employer on that date.
Daily Rate of Pay Calculation
$2,500.00 base salary/month + $1,500.00 average commissions/month = $4,000.00 average wages/month.
$4,000.00 average wages/month x 12 months/year = $48,000.00/year
$48,000.00/year ÷ 52 weeks/year = $923.08/week
$923.08/week ÷ 5 days/week = $184.62/day (daily rate of pay)
This example shows how the daily rate of pay is calculated when two different types of wages are earned.
Waiting Time Penalty Calculation
17 days, the number of days from the date the employer is obligated to pay the employee, March 15, 2002, until April 1, 2002, the date she is paid all of her wages.
17 days x $184.62/day = $3,138.54 waiting time penalty.